California Accused of 'Money Laundering' Federal Funds for Undocumented Immigrant Healthcare Amid $3.44 Billion Loan Request and $9.5 Billion in Costs

A recent study has accused California of exploiting a loophole in Medicaid to fund healthcare for undocumented immigrants, which has raised concerns about financial mismanagement. The report claims that California is effectively 'money laundering' federal taxpayer dollars, contributing to a growing budget deficit. Governor Gavin Newsom's Department of Finance has requested a $3.44 billion loan for Medi-Cal, the state's Medicaid program, which was expanded last year to include health insurance for undocumented individuals. Critics argue that the state underestimated the costs associated with this expansion. Since July 2023, California has reportedly funneled $9.5 billion through a Medi-Cal provider tax to cover these expenses, leading to fears that the program may become unsustainable.